International Trade Theories Overview

The exchange of goods and services across national borders.

An economic and political ideology that prioritizes state interests and relative power over free trade and mutual gains. It believes in protecting domestic industries by restricting imports and fostering exports.

An economic approach emphasizing absolute gains and free markets, advocating for minimal government intervention in trade and promoting cooperation for mutual prosperity.

Focus on increasing total wealth by maximizing output, minimizing waste, and promoting efficient resource allocation.

Emphasizes a state's position relative to rivals, focusing on gaining more than other states in trade to enhance national power.

The difference between a country's exports and imports. A surplus occurs when exports exceed imports. A deficit occurs when imports exceed exports.

A state should specialize in producing goods and services where it is relatively more efficient compared to other goods it produces, even if not the most efficient producer globally, to gain economic benefits through trade.

The flow of goods and services across national boundaries without tariffs or other restrictions. It aims to maximize global wealth creation through specialization and efficient resource allocation.

Policies designed to shield domestic industries from international competition through tariffs, quotas, subsidies, and other measures.

Deviations from ideal market conditions, such as monopolies, oligopolies, corruption, and political interference, that can disrupt efficient resource allocation and price mechanisms.

Political measures to inflict economic damage or express displeasure with a country's actions by restricting economic interactions. They can involve freezing assets, banning trade, and restricting travel.

A policy of self-reliance where a state avoids trade and tries to produce everything it needs domestically. It is often ineffective due to higher costs and lack of competitive advantages.

A tax imposed on imported goods, which can be used to protect domestic industries or generate government revenue.

Trade restrictions other than tariffs, such as quotas, subsidies, regulations, and other measures to restrict imports.

Selling products in foreign markets at prices below the minimum level necessary to make a profit, potentially harming domestic industries. It is often considered an unfair trade practice.

A global intergovernmental organization that promotes, monitors, and adjudicates international trade. It replaced the GATT in 1995 and seeks to lower trade barriers, promote fair trade practices, and resolve disputes among member states.

A principle requiring states to grant the same trade preferences to all WTO members, ensuring equitable treatment for all trading partners.

Reciprocal agreements between two states to lower trade barriers, often with specific terms for certain industries or products.

A group of neighboring states that agree to remove most or all trade barriers among themselves, fostering economic integration and trade flows within the region.

An association of producers or consumers of a certain product who coordinate to manipulate its price on the world market, potentially affecting supply and demand.

The most prominent oil cartel in the world, controlling a significant portion of global oil production and exports, allowing it to influence oil prices through coordinated production quotas.

Strategies by which a government actively works with industries to promote their growth and tailor trade policies to their needs, often involving subsidies, incentives, and regulations.

Legal protection granted to creators of original works, such as books, films, and software, to receive royalties for their creations. They are a contentious issue in international trade negotiations.

The part of an economy focused on providing services, such as banking, insurance, and financial services, which are increasingly important in international trade.

A downward spiral of conflict involving retaliatory trade measures, tariffs, and restrictions, as states respond to perceived unfair trade practices, potentially harming global trade.

The increasing interconnectedness of economies around the world through trade, investment, finance, and technology, leading to a more integrated global market.

The process of using fossil-fuel energy to drive machinery and accumulate products, marking a significant shift in economic development and global trade.

An economic system where the government controls prices, production, and consumption quotas based on a long-term plan, often with a focus on state ownership.

Former communist countries, such as the former Soviet republics and Eastern European nations, that have shifted from communist to capitalist economic systems with varying degrees of success.